beyondbrics

As construction at Moskva City, Moscow’s planned financial centre, sits at a standstill, plans for “Russia’s Silicon Valley” are rapidly underway – and the Kremlin actually seems to be making progress.

Arkady Dvorkovich, the president’s chief economic aide, told reporters today that the government was in final negotiations for both Cisco and Nokia to participate in the project, a development that brings Russia that much closer to reversing its decades-long brain drain which saw Google’s Sergey Brin and other budding entrepreneurs leave the country in droves.

Victor Vekselberg, the energy and metals tycoon appointed to head the Silicon Valley project, told president Medvedev last week that he expected an agreement with the project’s foreign partners to be signed by the St Petersburg economic forum in mid-June – a perfect opportunity, Dvorkovich said, for the project’s first board meeting.

The project fits closely in line with Russia’s other modernisation plans, a fact Dvorkovich was eager to highlight when – in response to a question on Europe’s debt problems – he chose to make a jab at the continent by saying it should modernise – the way Russia is, as reported by Russia’s DV News:

“I think that in the end [the debt crisis] will bring out European countries’, European leaders’ and Europeans’ readiness and motivation to modernise, like, for example, we are doing today to enhance the flexibility of our economy, to enhance the versatility of our workforce and to stimulate innovative development…” he said.

While Dvorkovich might be optimistic about Moscow’s Silicon Valley, others, like a prominent Moscow economist – who wished to remain unnamed – take a more sceptical view:

The government wants to report success by 2011 and that of course is not going to happen. The biggest problem is Moscow needs a different business climate and a different level of intellectual freedom.

He said although the government planned to create a separate, English-speaking law enforcement unit for the region to make the project more attractive to western investors, its biggest challenge would be making it attractive to recent Moscow graduates for whom Gazprom has always been the number-one employer.

The Kremlin can sell the project to Cisco and Nokia. But will it be able to sell to its budding entrepreneurs?

Further reading:
Russian tycoon leads high-tech project, FT